By Hans M. Zimmer
Last Wednesday, the administration released a fairly short announcement that the “employer mandate” provisions of the Health Care Reform Act would be delayed until January 1, 2015. Interestingly enough, that is after the mid-term Congressional elections so this will add plenty of fuel to the election rhetoric next fall. For employers, what this basically means is that the requirement for companies with 50+ employees to offer healthcare coverage to all employees or face penalties of up to $3,000 per employee is on hold for a year. This announcement came as the result of very intensive lobbying from business groups who said they really did not know how to comply. Several thousand pages of regulations had been released, then withdrawn, re-released, amended, etc. on various topics – how to determine whether a company was a 50+ employer who had to comply, how to determine who was a full-time employee (30+ hours), what exactly constituted “affordable” coverage that employers had to provide along with several other key provisions of the act. With the continuing stream of regulations, both proposed and final, that had been issued by either DOL, IRS or HHS (which sometimes contradicted each other), compliance was almost impossible to achieve.
Note that the individual mandate has not been delayed. The White House made it clear that individuals without health insurance would still need to get insurance by January 1, 2014. The “exchanges” operating in the various states will be open for business starting October 1 this year to allow currently uninsured individuals to get insurance through their state. The exchanges are also designed to be used by small employers who currently do not have a health insurance plan for their employees. Failure to procure coverage by an individual results in penalties for that individual.
At this point, the law is delayed in part, effective in part - employers don’t have to offer coverage yet but individuals have to go get it. I would not be surprised to see the individual mandate extended as well but it has not been as of yet. More to come, I’m sure.